The speed at which terms and conditions in the retail lending market are being toughened up is breathtaking. Nationwide Building Society's decision to penalise any homebuyer putting down a deposit of less than 25 per cent is a vivid illustration of how the credit crunch is now affecting ordinary consumers.

Barely a day goes by without a mortgage offer being withdrawn or the fine print on credit card debt being redrafted to impose fresh conditions or penalties. The 100percent mortgage is already a fading memory.

Last year the banks spent their time repricing risk in the wholesale markets - not only the terms on which they would invest in asset-backed securities and leveraged buyouts, but also their enthusiasm for commercial property loans and riskier corporate borrowers.

Now they are turning their attention to retail borrowers. Partly this is more efficient pricing. First-time buyers will howl, but Nationwide is completely rational to reward deposit-rich buyers with more generous terms. Bluntly, they shoulder much more of the pain in the event that they default during a housing market collapse.

Partly, too, it is about banks cutting their cloth to suit their changed circumstances. With wholesale sources of finance cut off indefinitely, only banks with the biggest armies of depositors can afford to keep lending at the same pace, even if they wanted to, which they don't.

Northern Rock may be the only bank actively turning away borrowing customers and urging them to shop elsewhere, but many of its rivals privately share that sentiment. They don't want the business at any price. Credit is being rationed and rightly so. Thrift is being rewarded. This is going to be the year, and perhaps the decade, of the saver.

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